Naik hints at hard days for consumers

www.hinduonnet.com By N. Ravi Kumar

Nagapattinam March 1. A day after the Finance Minister virtually turned down his plea for an excise duty cut on petrol and diesel, by not making any announcement to the effect in the budget, the Union Minister of Petroleum and Natural Gas, Ram Naik, hinted at hard days ahead for the

consumers if the volatility in international crude price continues. "There is no choice if the price (of crude) goes up," he told presspersons after inaugurating the Rs. 96-crore oil jetty of the Chennai

Petroleum Corporation Limited (CPCL) at its Cauvery basin refinery here today.

Stating that several factors, including the war-like situation in the Persian Gulf and the ongoing labour strife in Venezuela, were behind the present volatility, Mr. Naik said, "if the duty (on the automobile fuels) is reduced," the resultant burden on the consumers would be comparatively less. With the country 70 per cent import dependent for its crude requirement — the oil import bill last year came to Rs. 78,000 crores — it had little option. "There are only two options, either to restrict the imports and stop economic activity, or reduce the supply," both of which were not easy, Mr. Naik said.

Noting that the Rs.1.50 per litre increase in petrol and diesel prices, after the latest fortnightly revision announced on February 28 evening, would have been double if the oil companies had compensated for the increase in the crude prices, the Minister said, "some sort of cushion arrangement (to absorb such shocks) were being tried out." The decision of the oil companies was their own and taken in the interest of the customers, he said, even while adding, "I will have a dialogue with the Finance Minister" seeking reduction in the excise duty.

Allaying apprehensions that the supply of petroleum products would be affected in the event of a war in Middle East, Mr. Naik said the stock-piling experiment conducted by the Ministry, when a war with Pakistan looked imminent last year, came in handy now. The present stock was enough to meet the country's requirement for two months and "we have made contingency plans to purchase crude from countries that do not come under the war zone."

However, he refused to divulge further details about the countries and the quantum of orders placed for obvious reasons. Similarly, he refused to comment on why the Centre continued to impose cess on petrol and diesel when the customers were already feeling the pinch of the volatility in the global crude prices.

Underscoring the significance of increasing the country's indigenous crude production, the Minister said the fourth round of the New Exploration Licensing Policy were to be announced in the first week of April and it would include blocks in the Cauvery basin. The Directorate General of Hydrocarbons, he added, would announce the details about the blocks. The present regime at the Centre, he added, awarded as many as 70 blocks under three rounds of NELP as against the 22 blocks awarded in the previous 10 years.